Insurers have many reasons to contemplate a system upgrade: the need to modernize core IT and infrastructure, improve business capability with attractive new features and functionality, boost process efficiency and customer service with straight-through processing. Or, simply, maybe their licensing agreement requires it.
We’ve helped many insurers drive business outcomes via a system upgrade, including better customer engagement and increased revenues. From these experiences, we offer six guidelines for insurers to consider when moving forward with an upgrade:
- Know why you’re upgrading. The better you understand your reasons and goals for an upgrade, the better you can communicate the benefits of doing so – as well as the risks of doing nothing or restarting from scratch. Stakeholders also need to understand the business drivers to ensure they can deliver needed support. Buy-in starts with a clear roadmap that clarifies the path forward for both IT and the business, and sets the stage for collaboration.
- Ensure strategic alignment. Upgrades need to be carefully incorporated into the IT roadmap and/or business strategy to promote value, optimize return on investment and drive positive momentum. Failing to do so can cause instability in the IT system backbone and introduce risk into the IT landscape, especially with the integrated nature of today’s applications.
- Assess the value of your current application customizations. A system upgrade offers an excellent opportunity to reevaluate application customization decisions made during the initial implementation and assess whether they provided the expected value. This is especially true if a lot of time has lapsed since the initial implementation. Ensure these customizations still align with your most current strategy and business objectives.
- Solidify the business case for implementing new features offered with the upgrade. As advanced technologies and new features emerge to meet insurers’ needs, they enable breakthrough capabilities that can drive additional value for the business, its partners and policyholders. Over the years, we’ve seen many more out-of-the-box capabilities become available that lower total cost of ownership, enhance productivity via straight-through-processing or accelerate speed to market by enabling self-management of system business rules.
- Avoid scope creep. At the same time, it may not be necessary to implement all the newest features available in the latest version. Focus on features that align with your strategy and objectives or provide business benefits and value.
- Watch your timing. Plan your upgrade to limit business disruption and enable end users to absorb and adapt to process and application changes. Are you running other dependent software products or infrastructure that isn’t compatible with and supported by the upgrade (such as specific versions of Java, Oracle and SQL Server)? Are there current planned or ongoing projects for other systems or applications (such as database upgrades or interfaces) that will impact the upgrade?
Ensuring a Successful Upgrade
We apply these guidelines when we work with clients to modernize their core systems. In one case, a Fortune 500 global property and casualty insurer needed to upgrade to the latest version of Guidewire because the software it used was three releases behind and was no longer supported.
Before getting started, the insurer asked us to assess all customizations within the existing environment. Customizations made to the system’s multicurrency functionality, for example, had been made in the previous version but were available out-of-the-box in the latest version. By removing the customization, we reduced total cost of ownership and maintenance expenses.
New Guidewire features, such as multiple document upload, enhanced business value by improving usability and capacity. The use of our Guidewire testing framework and accelerators reduced the time for automation test script rework.
Overall, the insurer achieved the following benefits:
- Higher server scalability, which improved system performance.
- Better usability and business capability due to new features like multiple document upload.
- Reduced complexity and lower costs by decreasing the number of applications to be managed and subsequent infrastructure footprint.
- Increased ability to scale up or down depending on business needs.
- Lower cost of IT Infrastructure and operations.
A system upgrade doesn’t have to be a costly, disruptive endeavor. Using lessons learned from their peers, insurers can reap the benefits of using the latest version of their core applications.
To learn more about our Guidewire capabilities and our factory approach to system modernization, please join us at Guidewire Connections 2019, Nov. 3-6, 2019, at the Gaylord National Resort in National Harbor, MD.
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